The UK has been a member of the common market (now the European single market) since the 1970s after a prolonged period of negotiations. So, we stand on the verge of splitting a union which has lasted less than 50 years and become widely known as Brexit. The problems, concerns, fears and misinformation swirling around Brexit are there for all to see. So, might Scottish independence suffer a similar fate?
Breaking up a 400 year union
While those for and against the UK union have very different opinions, this is a union which has lasted in excess of 400 years. The UK property market is currently stagnating as we await movement on Brexit but there are fears that Scottish independence could lead to even greater issues. Surely it would be more difficult breaking up a union which has lasted in excess of 400 years compared to one which has lasted less than 50 years?
UK property market
We all know that the UK property market is centred round London and the south of England. The Midlands and the North, Scotland, Wales and Northern Ireland have buoyant property markets but London always seems to lead the way. However, what if Scotland was to leave the UK and was also forced out of the EU by Brexit?
It is difficult to see this situation actually happening but if it did then it would be potentially catastrophic for the Scottish economy and the Scottish property market. In theory, Scotland could be outside of the European Union and outside of the UK with no direct trade deals. Even re-entry into the European Union could be prolonged and challenging with Spain unlikely to make it easy with its own internal independence issues surrounding Catalonia.
Could UK and Scottish governments ever agree?
More than three years after the UK referendum on leaving the European Union, we are in effect no closer to an exit. Such is the impasse in Parliament that politicians have been forced to announce a new general election. How would Scotland go about negotiating a financial settlement with the UK government?
Scotland currently enjoys the benefits of the Barnett formula which effectively tops up the Scottish budget to a pre-agreed level. There are some arguments regarding the real benefits of the Barnett formula but it is likely to be in excess of £1200 per person per year in Scotland compared to the rest of the UK. Quite how Scotland would survive without the Barnett formula, least in the short term, is debatable.
Impact on property prices
There are serious concerns that the Scottish budget deficit at the moment would lead to either a significant increase in taxes or reduction in public services (or both). Many also believe that the current budget deficit would bar Scotland from entering the European Union for the foreseeable future. Any issues which impact the Scottish economy directly and indirectly will have a knock-on effect on Scottish property prices. Talk of a new currency to replace the pound may also add to the confusion and concern going forward.
While there are short to medium term concerns regarding Scottish independence and the impact on the economy and Scottish property, there is no reason why Scotland cannot go independent. The only concerns would be the budget deficit, reliance on oil and the potential to be locked out of trade with the European Union and UK.
Maybe the UK government and their Scottish counterparts will learn from current Brexit issues and pave a much smoother way to independence if voters choose that option. However, in reality there are a lot of issues to unpick with the union of United Kingdom and negotiations could make Brexit look like a walk in the park!